Opções binárias para iniciantes iq option
I ve played there. There are great places to play there in the park. In fact, I m playing in a tournament that starts tonight but, no, it s not like New York City. Guy But good for you that you re playing. I can t honestly claim that I m a regular chess player. I wish I could but I can t. I ve got Blitzin open right now. But, I ll just go and lose a bunch of games if I go and play laughs. Rob I was trying to download Blitzin and get it set up so we could play but I don t think I can do that and talk to you at the same time.
I tried and failed. In your book, The Education of a Value Investoryou talk a little bit about chess and bridge games and their relationship to investing. I wanted to explore that a little bit, if we could. One thing about chess I ve really gotten back into the game a lot in the last year and will listen to Grand Masters. He s ranked 14th in the world. You can watch him on chess24 play speed chess with different players and he ll talk about the game as he s playing.
Of course, he s winning virtually every single game. The thing I ve noticed is you ll see a position and in my mind I m trying to calculate as I m following the game Okay, he can move his knight there and the other side will move their bishop there, and then he can move his rook He just instantly sees a three, four, or five move combination and he talks about it.
Peter Svidler is one of them. In a blink of an eye he sees it. I know he s a Grandmaster but still, how do you calculate that quickly. At first I wondered, how in the world he could calculate that. After watching him for awhile I realized, you don t. He s not calculating at all. He just sees the pattern. He recognizes the pattern, thinking fast and slow for example. I m thinking slow and probably coming out with a bad result.
He s thinking fast because he doesn t really have to think at all. It made me wonder, are there patterns you see as you re evaluating companies or industries in selecting investment possibilities. Are there patterns that you ve recognized over time that can help you identify investing opportunities. Guy I don t think I m particularly good at it but I think there are patterns of human behavior that I can certainly start to recognize even though I m not necessarily good at managing myself in those patterns.
I get very concerned with situations where there is an enormous amount of controversy. What I really love is situations where there is an enormous amount of fear and that fear is not rationally based. I think people are just not looking there. I haven t come across those situations too often but I can see that happen very, very clearly now and I know if I m operating in a place where that s the case. That s why I think Warren Buffett is so confident that no matter what direction the market has turned and how overvalued things get and how competitive the investment gain gets, there are always going to be pockets where people are just fearful and don t want to tread.
And, if you re willing to tread there, then you ll do fine. I just remembered, a way to reinforce that pattern for me, was in the height of the financial crisis Warren Buffett bought shares of Goldman Sachs. And, it s just incredible because all mayhem was breaking loose and he dove straight into the middle of it and bought shares of Goldman Sachs. There was very little certainty about the way things were going to unfold. I think that was an example of him saying, This is a valuable company.
There is a lot of uncertainty around it but these guys are smart and will figure it out. And I m buying into that uncertainty. And I m buying into that fear. Which, by the way, you re probably going to bring it up later, is exactly what is really hard about companies like Amazon and Netflix and which doesn t exist.
The emotional pattern you need to get in to buy Amazon or Netflix right now is to say, Yes, those guys are all exuberant about the future of this company but I m even more exuberant. You re buying on top of other peoples exuberance and that s a very, very different place to say, buying Goldman Sachs in the middle of the financial crisis. It s not an analytical pattern but it s an emotional pattern.
I think that what s hard when you look at analytical patterns. I wrote my annual report about bundling. Economies are bundling or scaled economies, share. And what s really frustrating about that is that often other people see those patterns as well, if not better, than I do. So I m coming late into that game. But the fear pattern is a really, really valuable one. I think once you do extraordinarily well without such good analytical abilities in general, you ought to buy off a fearful buyer.
You want to be a buyer when other people are fearful. And there s no fear. I think there are some people that would never be able to beat you or me at chess because they re not analytical thinkers. But, they get a sense of that. They get a sense of where they want to be. There is a guy I met not so long ago who lives in Geneva of all places, who is a retailer.
At the time, he was putting all of his money into Canadian real estate. And actually, it was really clear that commodity prices had come down. The tar sands oil was no longer profitable so Canada was suffering but he was buying real estate in downtown Toronto. He had a sense that that would turn out fine over time. He was shifting his whole real estate portfolio into Toronto real estate. And, he didn t know that much about Toronto real estate but he knew he was buying into a situation which wasn t entirely distressed, but there was fear.
There was lack of liquidity and people in Canada were very, very unhappy. But he wasn t buying some speculative he was buying into real estate where he knew, one way or another, this would work out for him. So he wasn t being as greedy as he possibly could. He wasn t buying into tar sands companies that were losing enormous amounts of money and filing for bankruptcy.
I think he was buying downtown Toronto real estate. Yeah, I think there are patterns and you get better at it. Rob You mentioned the book, The Manual of Ideaswhich in some ways I see almost as a book of patterns. I think of Deere Company, which Berkshire owns, but with crop prices down and farmers not buying equipment they struggled.
The one I use, that I guess is really the fear pattern but is when a company s stock is beaten down for cyclical reasons. But, there s no way that s a permanent situation. That s going to change. To me that s kind of like low-hanging fruit. You don t know when. That just seems to me like an easy decision.
Guy Actually, I ve not really studied Deere Company but I think having met somebody who used to work for Sargenta, companies like Deere Company and farming companies are in the business of organizing the farming supply chain. Thus, participating in the earnings of agricultural land and helping agricultural yields improve and helping the returns to farmers improve. They re kind of surrounding the farm. There are four or five suppliers who surround the farm and make money effectively in partnership with the farmer.
The fact that they re in a position to make and sell equipment to the farmer means they re in an ongoing financial relationship with the farmer and in a position to propose all sorts of other solutions to their farms. Unless you think that farms are going to disappear which is not the case then Deere Company will have opportunities to make money.
But it s worth saying that you still want to know that they re not open-leveraged. There are a whole bunch of other things one wants to know. There may be marginal supplies of farms which don t make it through this cycle. Another pattern and again, Warren Buffett is the master of it. I was sitting at the Berkshire meeting during the financial crisis and I own shares of Shaw Harley-Davidson and I discovered that Buffett or Berkshire Hathaway had become a lender to Harley-Davidson.
He was asked that question at the annual meeting and he just said, If we don t have to make a bet on exactly how well Harley-Davidson will do, then we don t want to have to make that bet and we re offering perfectly decent returns at a more secure place in the capital structure so we took it. So this idea of, you don t want to be on the margins of economic activity you want to be at the center.
You want to be in the things that humanity can t do without. It was inevitable that Berkshire Hathaway would end up in power generation, for example, because that just drives everything. That s another pattern is the decision I m making taking me closer to the core of economic activity or is it taking me to the edges. Am I buying derivatives and options or am I buying debt ownerships in companies.
And he s constantly moving his portfolio towards the center. At the time he made his investment in Washington Post, I don t think any of us ever thought this was I mean, we talked about one-newspaper towns and this was considered to be at the core of advertising, the core of how you reached consumers and the ability to advertise in a local newspaper was one of the most important ways in which retailers reached potential consumers.
That s just been completely blown apart. You have to have an awareness that on a regular basis the companies you might think are at the center may not be in the future. Actually, when it comes to power distribution, I don t think it will change. Power used to be generated by a small number of very large power plants and increasingly power is being generated by wind plants and solar plants. Solar installations on people s roofs, heat exchanges, and so forth.
It becomes a far more distributed generating capacity in which, if you own the transmission as a power company you re probably fine, but if you just own centralized generating capacity you may not be fine. The world is changing all the time. Rob And that sort of distribution is happening in industry after industry. I should say too, and I apologize to you and the listeners also I ve been fighting a cold for 10 days so I m trying my best not to cough into the microphone.
You mentioned Harley-Davidson. Does your fund invest in debt at all or is it all equities. Guy I can invest in anything I like, Rob. My regulators here or the people who represent the regulators have a hard time understanding that. I keep on having to pull out my fund documents to show them the investors have agreed and understood that I can invest in anything.
Having said that I can invest in anything most of the time, I m invested in the equities and securities of publicly-created companies because I think that offers the best risk reward. Debt securities are lovely but you re not going to get a significant reward out of them. You might get a few percentage points better than the bond rate. In equities you can double and triple your money if you re in the right places.
That s where the risk reward is really, really good. So long as you re in conservative funded companies, the value of your principal ought never be in doubt. Although, I had my head handed to me a couple years ago when the equity of a company I thought ought not to be in doubt, ended up being worthless. Yes, I invest in equities, securities as I m sure most of your listeners do which is the right place to be if you re saving for retirement or saving for the education of your children.
That s where we all ought to be. Here s another pattern. This comes from an interview I did attend the Daily Journal meeting which is where Charley Munger holds court once a year. Somebody was asking him about some investment path I think was venture capital and he just looked at him and said, Look, that s an insider s game. I ll never win at that insider s game unless I work 20 years to be an insider.
He talked about, if I m not mistaken, real estate as well. Real estate is a very local insider s game in the vast majority of cases. I was glad they had become a lender but slightly miffed that he hadn t bought the shares. We all understand that there is a retail location, for example, that s just never worked. And often it s not easy to understand. I m thinking of a Chinese restaurant that opened up on a corner not far away from where I live, where just nobody s been able to make a retail operation work there.
I feel bad for the current occupier s because they haven t made it work either. So he distinguishes between those kinds of businesses where insiders are winners almost always but outsiders are winners almost never and investment opportunities where the playing field has been leveled so that outsider s can also win. In our local neighborhoods we will understand the nuances of the planning commission and what going on, on a particular corner.
That s clearly a question he asks himself very quickly when he s assessing something. He just doesn t plan things where insider s can win against outsiders. He doesn t feel any sense of remorse or envy over the money venture capitalists are making or that blockbuster movies make or the real estate people make in their local markets. He s waiting for those opportunities where he can say, I m an outsider but I ll do fine in this.
If you take the publicly traded equities, and the best example of that is indexing. Indexing is a game where an outsider can win if you just stay put and do dollar-cost averaging. You re defined to it, not by law, but you re defined to win. There are plenty of other publicly traded securities where the information that I m getting is the same as the information everybody else is getting so I have a chance of playing on a level playing field.
There are some publicly traded securities where it s not a level playing field. It ought to be but it isn t. So that s a pattern. Rob Turning from patterns to Amazon, just to kind of tee-up this question, I ve said on this podcast, and I ve written on Forbes, that I think Amazon is a wonderful company. I have their credit card, I m a Prime member. It doesn t give a pattern of whether to invest or not but it is a simple pattern that allows us to decide whether we want to proceed down a particular route of analysis to see if we want to make the announcement.
I watch their videos. I listen to their music. I buy from Amazon more than I should. And I ve also said that I think it s a lousy investment because of the valuation. So, imagine opções binárias para iniciantes iq option surprise when I m reading your annual report I m showing Guy throughout the video I got it. And in it you have and this is not new. Your approach is a little bit different this year but I think it s great. You sort of do a case-study or postmortem.
In this case it was two stocks that you considered buying and passed on. One was Valiant, and I don t think we need to spend any time on that unless you want to. But obviously, you dodged a bullet there. But then Amazon you regret not buying Amazon. I think you were comparing 2012 is when I think you considered buying and someone I think it was Nick Sleep, was very bullish on Amazon.
Guy Yeah, it was Nick. Rob If you compare the price in 2012 to today, I think any of us would wish we would have purchased it because back then it probably had a market cap of about 88 billion. And today opções binárias para iniciantes iq option s 450 billion or 500 billion. I think anyone would have liked to buy if you just focused on the price but help us understand as a value investor, why you viewed Amazon as a good investment in 2012.
The answer I m going to give you is one I will need to listen to myself. The biggest danger we have as value investors is that we fall into value traps. Guy I think you ve teed this up in a beautiful way. There are plenty of things that are cheap on some metric scales that is actually not going to make this much money. The obvious value trap and there are many different kinds of value traps. I used to get very excited when I looked at small-cap companies and I d see that they were trading at some ridiculous multiple of earnings.
The value trap there was where the management and the board of directors are using the company kind of as a retirement plan. In theory, the management can be removed and you could release all that value and pay somebody a lot less money to do the same job. In practice, it s impossible to remove the management. There is value embedded there but you re never going to be able to get it out.
There was this famous case with Bill Ackman and a real estate company. It was called, First Union Realty, I believe. He went and decided to fight the management on the fact that they were doing this and the management turned around and said, If you want to do this to us, we ll destroy the value. By the time he won, he had lost because the value inside the company had been destroyed.
We re buying into outside passive minority investors, but buying into vehicles where we re unlikely to change the course of event and unlikely to make any significant changes to the way the company is being run so we have to buy into a vehicle that s capable of becoming more valuable ideally, and sharing that value with all of the other shareholders.
That s a hard thing to find. There are plenty of companies that are just not growing and if you own a company that s not growing first of all, the margin of safety has to be greater. If they re not reinvesting money at a good rate of return if you buy a dollar bill and in 10 years time it s still a dollar bill, even buying it for 10 cents on the dollar may not be cheap enough given you may have to sell it at a discount.
Whereas, if you have a dollar bill that s growing very rapidly, you might even want to pay a dollar for it if it s going at 30 percent PR. The company is small enough and they control enough of the shares that they re sucking an enormous amount of the value that has been created in the company out as direct payments to the management. That is part of the analysis we have to do and it s dangerous for the growth of one s wealth to be invested in one or another kind of value trap.
I guess this is all a long way of saying that we have to Warren Buffet said somewhere that growth and value are joined at the hip. They re all part of the same thing. All intelligent investing is value investing. There is no great honor in buying a company that just has cheap metrics for the sake of buying cheap metrics and holding out some flag that says, I m a true value investor. You have to be willing in fact, you re better off engaging with better businesses and trying to understand how that value is growing and whether we want to own and pay up for that better business.
That s just a very long way of saying that just because you or I consider ourselves value investors doesn t mean that we throw out of consideration, a company for which we have to pay up. Obviously, then the question is how do much do we pay up for that business. In the case of Amazon, there is a very strong argument for paying up. Going back into the world of value traps, I m going to take you through, if you allow me for about four or five minutes, the analysis of an investment I had which was kind of a value trap.
I discovered this company called, RLI Replacement Lens Insurance company that regularly wrote combined ratio of well below 100 which meant that just from the insurance operational side, they were highly profitable and you didn t even have to worry. The vast majority of insurance companies were unprofitable on the insurance side but they make their money on investments. I figured out that you wanted to buy insurance companies who had low combined ratios were comfortable as underwriters.
Researching their annual reports we know that one of the things he talks about regularly is how his insurance operations make money purely on the underwriting side. I owned RLI Insurance for about four or five years and the share prices were going nowhere which, of course, was more than a mind of frustration for me and I kept trying to figure out why. A big part of the reason why was because they just couldn t grow their sales.
They couldn t grow their insurance underwriting and when I dug deeper into why they couldn t grow their insurance underwriting it made an enormous amount of sense in that the way they got comfortable underwriting was to find the buyer who had nowhere else to go. They had an unusual insurance problem to solve that couldn t be solved by the normal and competitive markets. It needed an entrepreneurial underwriter who was willing to underwrite that unusual risk.
So the buyer would pay an enormous amount of money for that insurance but you can be sure as hell that they were very reluctant to pay. And if they could possibly get away from paying it, they would. The company was consistently losing customers. You could have a business that is very, very profitable because they find a way to charge a lot for something but they cannot grow. Warren Buffett understood that and when we see the reason why Warren Buffett likes Geico Insurance so much is that they managed to make an underwriting profit along side of under-pricing of their product relative to their competitors.
They under-priced their product, they charged less than their competitors and they make money. That creates the dynamic of continuous growth because Geico has grown every year for the last 20 years I ve followed it. I m pretty sure of that. There may have been one or two years where they haven t grown but they grow expecting that it s amicable for a commodity product you have to pay less for that people will end up finding their way to Geico.
In the case of a company like Opções binárias para iniciantes iq option, or as in the case of Geico or Netflix or I ll give you another example which is not publicly traded. In the case of IKEA, you re baking in growth of your business through your low costs and the fact that you re priced lower than your competitors. Now we come along, you and I as analysts, and you say, How much do you want to pay for that.
We have to be willing to pay more because a business like Geico, or for that case, Amazon, could be worth four or five times more down the road. Whereas RLI Insurance or your local jeweler they just won t get there. They will never grow because they re never creating that kind of customer loyalty and the desire to come over to them because they re charging less for their product. Or can grow four or five times its size let s forget about valuation for a second.
If you take 25,000 publicly traded companies on the planet, there are probably only 400 or 500 companies where the owners and management really understand this idea of pricing your product in such a way that people keep wanting to come back and that get more and more customers every year. If you find a company that can actually make money while doing that because many companies that under-price their product just go bankrupt.
That s a pretty special asset. A very, very special asset and Amazon is one of those. Then the question is, how much do you pay for it. There is the debate between me and Nick Sleep in that Nick was so extraordinarily confident of both the cost of Amazon being so low that they could under-price their competitors and that this would continue long enough for them to grow to be many times their size, and that their ability to re-price the product at some point to make money in the future would be such that this was all bankable.
And I ve regretted it ever since. He was convinced of that. I don t know if that makes sense. Forgive me, but I dove into what I hope is not a rabbit hole but I guess I wanted to take you and your listeners through the analysis of why paying up for better businesses can and does make sense from a value investment perspective.
In my case, what s really hard is that I just don t know that I want to take all of that to the bank. Rob I think that s something that Warren Buffett has talked about because he was very much, as he described it, the cigar butt analogy, to describe his investing approach years ago. And Charley Munger sort of brought him around to say, Look, sometimes you ve got to pay a little more but you re going to get more in return from a solid company.
I think with Amazon, again, borrowing a Warren Buffett phrase, I put that in the too difficult bucket for me. Because, while I certainly assume Amazon is going to continue to grow given everything I know about the company. At that point, the potential range of valuation in my mind grows to a point where I just can t really at least with any confidence for me figure out what the company is worth. I can accept that you might pay more for an Amazon than you would a Deere Company just to go back to a company we mentioned because of its growth potential but then I m kind of lost.
I went through this sort of basic analysis that Nick Sleep took me through. And you re making some pretty big assumptions and there are plenty of other people willing to do that. It s a hard place to be. One of the great reasons all of your listeners should attend a Berkshire meeting is that you get to listen to some extraordinary guys, not just Warren and Charley. There re all these events around. Markel Insurance is run by this extraordinary group of people that includes the Markel family and a guy called, Tom Gayner who runs the investments.
He talked about how when you own an investment and it s a good company but the valuation starts getting up there, the air starts getting thin and it becomes hard to think straight. It s kind of a disorienting place to be. I ve been there where I ve owned companies at very high valuations that ought to last for a very long time but more often than not, in my case, the valuations come crashing down for one reason or another. Then you see Amazon and the people who own it have all the reasons that I used to have for these other high-valued companies I ve owned in the past, and I ve been on both sides of that coin so who is crazy.
Maybe crazy is too much of a word. Who has got the wrong end of the stick here. If you go back to the pattern recognition, and I think this is what did it for me, is that to dive into something and say, Yes, I know this is highly-valued but it s actually still cheap because I ve made all these adjustments, and the guy s driven the price up as high as it can be driven, is effectually what someone buying it is saying. It s just a pattern you want to avoid. That s easy enough in some circumstances.
What becomes hard in investing is that I have to manage my sense of regret, my sense of remorse, and my sense of being a complete and utter idiot, and my sense that Nick Sleep has been making money hand-over-fist with one simple decision to buy Amazon, whereas I ve been trying to eke out returns by owning the likes of Deere Company and others. And that s just really hard to manage.
Again, that s something where I think Warren Buffett can teach us all a lot because it really doesn t bother him and it shouldn t bother us. Netflix is one. Facebook is one. Google is one. These are businesses that don t have to invest much in order to grow. What I d also say, Rob, is that the world has changed so dramatically because there used to be very few precipices like Amazon whereas now, there are an extraordinary number.
Rob Yeah, yeah. If you own it, it feels great and if you don t, it feels sickening laughs. I ve read that some say Apple should buy Netflix. I m not so sure but, what do you think about Amazon s purchase of Whole Foods. Guy Going back to Amazon for a second before you get into Whole Foods. Who could have predicted or even understood that they would develop a whole new business in the cloud-computing space. And that it would turn out that cloud-computing business would be enormously profitable with enormous switching costs.
People that get locked into that were in the right place at the right time. I think that was just a stroke of luck, an enormous stroke of luck, then to have the extraordinary luck a business genius to see it, understand it, and to have the wherewithal to invest enormous amounts in the early years. There are engineers at Google I know who have talked to me about the enormous challenges of competing with Amazon and that s Google.
Then we get to Whole Foods. If you go to Amazon s website and you look on a particular page you see all the other sites they own. What becomes too difficult for me and I m not a professional analyst so maybe it s not too difficult for you or others, but for me what s too difficult is valuing the company. They re really good at taking out anyone who d encroach on the space they seek to dominate.
A long time ago I found this web service called, Library Thing, which is just fantastic. It s basically a recommendation engine, not based on what books you buy, but what books are already in your library. That was a beautiful idea for me. Why should I have Amazon recommend books to me based on what I ve recently purchased. Why not recommend to me on what I already own. And I found a whole bunch of things that were interesting to me. Then I noticed and I haven t followed it that closely, that Amazon had gone and either bought or created a business called, Good Reads.
And Good Reads effectively does the Library Thing but they do it better with more capital. I m sure Good Reads doesn t make any money but it s there to protect Amazon s franchise and I think that s what they did with Zappos and the Zappos purchase was something like 2 billion or 3 billion which was a lot of money at the time. I remember asking Nick Sleep and he said it was none of that for Amazon.
But they sort of saw Zappos as these guys who were doing something extraordinarily well, doing online retail and they didn t want to fight against them. It just shows that Amazon really intends to own the food space in some way, shape, or form and they ve decided that Whole Foods is a big enough competitor or an important enough competitor.
Exactly what they ll do with Whole Foods, I have no idea. I guess my initial reaction is that it looks like it might be an acquisition the way Good Greens was or Zappos was which is Amazon saying, This is a space we want to own. And we want to control the most important player in the space. Or maybe they re just buying relationships with customers. One other thought and maybe you ve thought about it more than I have, is I imagine it might be a signal of the beginning of the end for something with Amazon because if they re buying into bricks, they re actually saying that through their AmazonFresh, they haven t been able to develop the relationships with the end user.
Or they actually don t have the right configuration of real estate. It s somewhere between the Whole Foods brand and its relationship with the food buyers and their real estate configuration and or suppliers that they ve decided they need that. That s 13 billion of investment that is real money. And like you said, Amazon s been too hard for so many different reasons.
Who knows exactly why they did it, but we know there are some extraordinary minds behind it. Rob I think you hit on something with the real estate, distribution, and location. It ll be interesting to see what they ll do with it. The home delivery of groceries has not exactly taken off like people thought it might. But with Whole Foods, it s going to put them in physical locations that they obviously didn t have.
Who knows what they ll do. We may see small Amazon stores inside of Whole Foods. It s an interesting purchase. Guy An Amazon warehouse actually has products stored randomly and what they figured out was it doesn t matter because it s not random inside the computer. The computer database knows where everything is so in some sense what we get from Whole Foods is a distribution warehouse.
There is probably some algorithm behind it which will sort of balance, load, demand, or supply fresh foods across their warehouses plus the locations. It will be interesting to see how the algorithm works with that. That was my thought. You were going to get onto another question. Rob I was just going to say I appreciate your time. I know it s getting late where you are. You ve been very generous.
I have just a handful of rapid-fire questions for you. Guy Yes, of course. I have all the time in the world for you. Because I listen to your podcast and I saw how you want to help your listeners do a better job with investing their finances, I thought that was great so I immediately realized you have a pure motive here which I really, really appreciate. And I think what you re doing is great so don t feel like you have to shorten my time on this.
Rob Well, that s very gracious of you and I appreciate it. So these don t have to be rapid-fire. I ll leave it up to you the rapid-fire part. These are questions I think we can really learn a lot from you and we already have. But, these will questions will take it to the next level. This first one is, what do you read every day. Newspaper, magazines what s your daily routine in terms of reading. Guy My struggle to read is like meat and potatoes versus junk food.
It s just hard because I would even argue that reading my LinkedIn feed or Facebook feed or my Twitter feed is not pure junk. It s not pure junk, it s just not true. I follow a lot of interesting people and I do log into those services to see what s there and I learn a lot about the world. The problem I have is that it s very hard to filter the good stuff from the bad stuff on those feeds. In my ideal world, I lock myself away where I sit down each day with at least one 10k or meaty document that relates to a corporation.
And that ought to be my meat and potatoes. I think I feel really satisfied when I do that. I do it far less than I want to do it due to distractions. The distractions are not pure distractions. It s like playing chess. Chess in a certain sense is a pure distraction. For example, going into my Bloomberg monitor where I learn a lot about all sorts of things. I keep a Trello list. I don t know if you guys know Trello but it actually works quite well for me. The minute I decide to focus on a corporation, it s in there.
Every now and then I ll re-prioritize the list. It shows what companies I m looking at. Right now I m learning about and I ve never done it before, I m learning about renewable power. I recognized a pattern of fear and a pattern of lack of liquidity. Today I was reading a whole bunch of Howard Booth business school cases so I went onto Home Business School Publishing and a 5 or 8 a pop I bought about 10 cases all relating to solar power. Those kinds of things where the writer has really thought about the topic and has tried to communicate where there s been a high ratio of human thoughtfulness to the end writing product is, I guess, what it comes down to.
But I don t do nearly enough of it. I have ringing in my ears for the works of not Ted Wexler but the other guy Warren Buffett hired to run Berkshire s money, where he s read 500 pages a day. I m nowhere near 500 pages a day. Renewable power went through a bit of a bust over the last couple of years with the decline in the oil price. I try to do meat and potatoes in an intelligent way.
Rob Do you read newspapers regularly. Guy I still have a physical subscription to two newspapers but they re piling up the home. I have all the newspaper apps on my iPhone and I m reading my iPhone an awful lot as I go to and from work. And I m aware in doing that it s this tunnel vision. I m reading them less and less.
Even if I m aware of it and trying to guard against it, all of those kinds of apps and web pages are giving me what I m looking for. So there is a tunnel vision that develops. When you look at the pages in the newspaper you re getting what the editors thought was worthwhile. But what I think has also happened is there s a tunnel vision developing with the newspapers because the newspapers are now competing with all these other places to read. They re increasingly trying to say, What does my readership want to see.
I think where I became a little frustrated with the newspapers was particularly when it came to the world of tech. I realized the newspapers just weren t teaching me. There are genres of people like me who don t really have their finger on the pulse. Not that I necessarily keep up with it, but I found two web sources. It s a guy who lives in Taiwan. One is a website android newsletter called, Stratechery. He s a very thoughtful guy and he makes money he has people like me paying 300 a year and when you have enough of them doing that, it s a living.
He lives in Taiwan and he teaches opções binárias para iniciantes iq option about the tech world. There s another one that slightly a broader distributed one called, The Informationwhich to the likes of value investors such as you and I, we d have never heard of it but my sense is that this is very widely read. This is kind of basic knowledge. And you just not going to get. Rob What s the name of that again. Guy That s called, The Information.
Rob That s the name of it. I don t know where I found it or how I found it. I think I probably found it through that website, Stratechery. Yeah, it s at, theinformation. I think newspapers are changing so I find that websites like The Wall Street Journal and The New York Times are becoming more inclusive and they re finding the best content providers and they re putting them onto their websites.
I think I ve read too many newspapers. And in reading too many newspapers I was self-consciously aping Warren Buffett but at the same time my world was being viewed as being skewed because I was getting into old world genres, basically. It s not easy. I just have a message for all investors and all of us who want to approach the world of investing intelligently is we can t just ape what Warren Buffett and great value investors have done.
What they ve done in the past, what got them here won t get them there. What will get us to a great place tomorrow is not going to be by reading newspapers the way Warren Buffett reads newspapers. We ve got to intelligently engage with the changing information environment. Something I would tell you I ve done is, I ve started using an aggregator called, Feedly.
There is a woman who covers the automobile industry, Maryann Keller, who s just a phenomenal woman. She s got very, very decisive insights into the automobile industry. She doesn t write for major newspapers. You re not going to see her articles in major newspapers even though they should be there. But Feedly enables me to see her articles when they come up. I also experimented with a subscription to something called, Factiva.
What I like about the information is in Stratechery is that those guys are being paid by me, a few hundred dollars a year to write what is important. The problem with just internet sources is that if it s free, you re paying for it. You just don t realize it. You may just be paying it with an obvious ad which would be fine but you may be paying for it with a bias in the way the news source is coming at you which is quite dangerous.
I think what I like about paid sources is that the bias is clearly there. They charge you for this. But then, hopefully, there are no other biases behind it. But it s tough, it s really tough. Rob Those are some great resources. Guy The other thing I m trying to do in response to the unusual change in environment is that I realize that the best insights will actually come from conversations with people so I need to develop my relationships with people who have insight knowledge and who are themselves, well connected.
That comes with the development of a whole bunch of skills as well. I m in a position where I m prominent enough that if I take something that somebody shares with me and share it with the planet, a lot of people will see if I tweet something out. So, I have to be very careful and thoughtful about what I tweet out, for example. I can t just take whatever arrives in my inbox because a lot of that may be privileged or something that the owner of that would not be happy for me to do that.
If I can develop a reputation of being intelligent and thoughtful about that, sharing what the owner of the information clearly wants me to promote and share it and get exposure for something to where they can feel utterly confident that if they don t want me to share it, I won t. Developing that reputation is really very important. I m far too much on podcasts laughs like yours where it s. I, on the media side, feel overexposed.
Guy Well, I also want to be honest. There are other reasons to do it. Some of the people I respect the most You and I have not heard their names and they re not in the public domain in any way but they have a strong franchise amongst their social network that s adding value in a private way. If we imagine people like Collin Powell who is not a very public guy, but I m certain from his persona that he has some extraordinary relationships and is a guy I would have been so happy to share information with and know that it wouldn t go anywhere.
I would get a lot of value back from that. Behind the Google search bar, there s a whole bunch of knowledge about the world that is never going to make it to the Google search engine because people have an interest in not having it there. It s a real challenge in a certain way. Rob Yeah, it is. Speaking of information, you mentioned in your book that you follow about 20 value investors.
You know, Amazon a few years ago bought this company called Zappos, from Tony Hsieh. You have friendships, obviously, with a lot of value investors. And it s not necessarily going to make its way to the front pages of any newspapers. Are there resources online. I use DataRomaif I ve got the name right. I think it s a pretty good resource but maybe you have others where folks could see what other value investors are investing in.
Guy The choice of who to follow is rather interesting. I m getting to a place as an investor and I think it s partly as a result of size, where I realize it s really smart for me to look at what other investors are doing. For those listening, who might they want to follow if they re a value investor. In a certain way the Berkshire meeting this year was quite hard for me because I didn t own shares of IBM but I had this idea I could put Warren Buffett on such a pedestal where I thought he has got to be right about this.
I ve missed some opportunities and I ve had my head handed to me in certain circumstances because I was overly respectful of the moods of other value investors. I m not willing to earn it myself because I don t really see it. But I know he s going to prove everyone all of the doubters, wrong. Then I come to this meeting and discover he s pretty much sold most of his IBM because he woke up and did make mistakes.
He felt like he wasn t so sure about the future of IBM. I discovered that Warren Buffett is fallible and that s very, very hard for me. At the same time, I have this sort of idiotic idea that Charley and Warren read newspapers, therefore, I should read newspapers. And that may work for them but I need to work out what works for me and I can t ignore the fact that I m a connected guy. I wake up to discover Berkshire Hathaway owns Apple, and that kind of blew apart a whole bunch of attitudes I had towards tech.
I m capable of independent thought but I haven t been nearly as independent as I could have been. Follow the investors but don t ever lose your clasp for independent thought. Actually, that happens as you grow so my fund is of the size that I just have to do that, partly. For choosing investors to follow, something that s helped me and it s a running process over time is to say, Why am I following this guy.
Is it because his or her investments are well-known and I can read about them in places like DataRoma or elsewhere. And, I know they have far more resources than I do if an investment has passed their filters. A key element to it is what this reveals about the person s personality and to have a very strong sense about a person s personality and how it differs from mine.
So, Bill Ackman is far more willing to be competitive than I am. But there are other personality aspects. Some people are not willing to take certain kinds of risks.